Growth has continued to pick up in the eurozone as the single nation bloc puts
an 18 month recession further behind it.

Factory and services output rose for a second month in August, the composite purchasing managers index (PMI) showed, as the official GDP estimate confirmed that the economy grew by 0.3pc in the three months to June.

The PMIs add to the evidence supporting the European Central Bank’s (ECB) projection of a gradual recovery in the second half, which will help the global recovery.

The eurozone appears “on course for further modest growth in the third quarter but recovery looks like being a gradual process that will be vulnerable to any shocks,” said Howard Archer of IHS Global Insight.

The composite PMI rose to 51.5 from 50.5 in July, according to survey compilers Markit, below a consensus forecast of 51.7 but still the highest level since June 2011. “The eurozone recovery is looking increasingly broad-based, with more sectors and more countries emerging from recession,” said Chris Williamson, Chief Economist at Markit.

The gathering recovery has fuelled European stock markets with the Stoxx Europe 600 Index up more than 5pc over the past two months. Economic confidence soared to a two-year high in August.

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Growth in the second quarter was driven by exports, which rose 1.6pc against a 1.4pc rise in imports. Consumer spending rose 0.2pc and government spending was up 0.4pc. Eurostat also upgraded first quarter GDP from a contraction of 0.3pc to 0.2pc.

The ECB will today announce its interest rate decision and is expected to leave policy unchanged once again, to help drive growth and bring down Europe’s record levels of unemployment.

Rob Wood, an economist at Berenberg Bank, said: “We’re at the early stages of an improvement after a prolonged recession that has been very painful, particularly in euro periphery countries. Growth probably won’t be strong enough until the end of next year to start to make a dent in unemployment.”

Separate services PMI for China showed the index climbed from July’s 51.3 to 52.8 in August, the highest since March, reinforcing hopes that a slowdown in the world’s second largest economy will be averted.